Posts Tagged ‘investor’

I always wanted to be a tour guide and last week, I got my chance. As a favor to a group of French retailers visiting the US, I took them on a tour of Wegmans, WalMart and Costco. Not too many international visitors pile up on a bus to visit New Jersey in mid-January, but we did. I had set it up as a Compare and Contrast exercise – teachers can’t ever organize anything without some pedagogical purpose– but one of my visitors suggested the trip should have an entertainment theme instead. “Like in Club Med” he suggested. We toyed with a Soprano or Bruce Springsteen motif, but agreed the trip should be called The Good, the Bad and the Efficient (sorry, WalMart!).

At Wegmans, the quality of the food display earned great respect from my French colleagues, although I sensed some contempt for a culture that would deem food so unimportant as to be consumed inside a grocery store. When I suggested we should have lunch at Wegmans’ restaurant upstairs, I was told we needed “a proper place” instead. That place turned out to be the Bahama Breeze in Woodside, New Jersey. I learned this choice had resulted from a close call with the Olive Garden next door. We went for the not-so-tropical hamburger and fries, which everybody ate with exquisite fork-and-knife manners.

One of the greatest joys of being a guide for professional retailers, I found out, is to learn how to reverse-engineer anything you see into the store’s profit model. After a few minutes at Wegmans’, they concluded Wegmans could not earn investor-grade returns with such a high-quality, low-turnover food, particularly when served by such knowledgeable employees (they correctly inferred employees had to be trained and well-paid to answer customer service questions as competently as they did). Interestingly, few of the visitors spoke English, but watching employees answer my questions was enough for them to assess their competency. “I’d love to be a customer there” one of the French visitors concluded (although apparently not to the point of wanting to have lunch there), “but I would not invest in this store.” When they discovered the chain is private and only opens two or three stores a year (officially to control quality), they looked at each other with a knowing smile.

WalMart was deemed uninspiring, but cheap. “We used to have stores like that 20 years ago”, was the most favorable comment I heard. They pointed out everything that could be improved, from cleanliness to the spacing between screws on the hanging racks. There was an Apple table with a few iPhones on it, trying its best to look like a mini-Apple store, but there seemed to be few geniuses around, and even fewer customers. We asked a friendly-looking clerk how big the store was. Her response was emphatic: “I have no ideaaaaaa!” I guess we were not at Wegmans anymore. My visitors were back in the bus within 30 minutes (Wegmans kept them interested for close to an hour).

Costco turned out to be the hands-down winner. “They must have about 4000 SKUs in here, probably about one thirtieth the number of WalMart” one of them estimated. We later found out they were right on the money. They estimated total sales for the store, sales per square foot, average ticket price for the store by looking at a few cards at the cash register, average demographics of the crowd, and split of brands vs. store brand sales. They even assessed the frequency of visits by building a quick model of yogurt and cereal consumption by an average American family buying two giant packages of each at every trip. Beyond that, they concluded, an average American woman would no longer be able to push her cart all the way to the parking lot.

I hope I never have to teach or consult for those guys. Being a tour guide is a much safer profession.

Who I Am

I am a consultant and teacher who logs hundreds of thousands of air miles each year to share the principles of co-creation worldwide. As the President and Co-founder of the Experience Co-Creation Partnership (ECC Partnership), I work with a roster of global companies to implement co-creative, transformational programs, and processes. The April 2013 issue of Harvard Business Review features an article that I co-authored with Douglas Billings, "Community-Powered Problem Solving" illustrating how a brick and mortar business co-created solutions with their partners and changed the rules of the game. Earlier I co-authored (with Professor Venkat Ramaswamy) the book "The Power of Co-Creation: Build It with Them to Boost Growth, Productivity, and Profits" (Simon & Schuster Free Press, October 2010) and the Harvard Business Review article "Building the Co-Creative Enterprise" (October 2010).

WHY I BLOG

Co-creation is about connecting people’s brains. There is a method, a framework that can be taught conceptually and tools that can be implemented inside organizations. But at the heart of it is a personal transformation of people who suddenly see the world through a different lens. Consultants cannot tell those stories because of confidentiality. Academics are too removed from field work to have access to them. As if living at the intersection of these two worlds did not make me schizophrenic enough, I find myself of late developing a third, more humanistic streak: an urge to talk about the profoundly human aspect of co-creation. The stories I share in this blog are those of real people who have touched me in the somewhat random peregrinations of my global consulting and teaching career. Each of them embodies, in one form or other, the co-creation effect.